Kraken Takes Up FTX’s Mantle with Stock Tokenization Push into Trillion-Dollar Market

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The world of finance is undergoing a quiet revolution—one where blockchain technology blurs the lines between traditional markets and digital innovation. At the forefront of this shift stands Kraken, one of the longest-standing and most trusted cryptocurrency exchanges, now stepping boldly into the tokenized stock arena with its new xStocks service.

This move isn’t just about expanding product offerings—it's a strategic play to tap into the vast, $52 trillion U.S. equity market by making it more accessible, efficient, and inclusive through blockchain. But how does Kraken’s approach differ from past attempts by FTX and Binance? And what does this mean for investors, platforms, and the future of global finance?

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The Strategic Expansion Behind xStocks

Founded in 2011, Kraken has built its reputation on security, compliance, and innovation. As competition intensifies in the crypto space, Kraken is broadening its horizons beyond digital assets. In 2024, it acquired NinjaTrader, a futures trading platform, and launched traditional stock trading for over 11,000 U.S.-listed equities and ETFs in select American states.

Now, Kraken is taking another leap forward: stock tokenization. Partnering with Backed Finance, Kraken is launching xStocks, a service that allows non-U.S. users across Europe, Latin America, Africa, and Asia to trade tokenized versions of major U.S. stocks like Apple, Tesla, and NVIDIA, along with popular ETFs.

Each xStock token is pegged 1:1 to real shares held in custody by Backed Finance, ensuring full asset backing. These tokens are issued on the Solana blockchain, enabling fast, low-cost transactions and 24/7 trading—breaking free from the rigid hours of Wall Street.

This isn’t just a niche experiment. It reflects a growing trend: crypto platforms are no longer content being siloed in digital assets. They’re building bridges to traditional finance (TradFi), starting with one of the most valuable asset classes on Earth—public equities.

Lessons from FTX and Binance: What Went Wrong?

Tokenized stocks aren’t new. In fact, FTX was among the first to pioneer them in 2020. Through its Swiss entity Canco GmbH, FTX offered tokenized versions of Tesla, Apple, and even the SPDR S&P 500 ETF (SPY). Users could buy fractional shares for as little as $1, opening Wall Street to a global, younger audience.

Similarly, Binance launched tokenized stocks in 2021—featuring Coinbase, Tesla, and others—settled in BUSD stablecoins. Both platforms emphasized accessibility and innovation.

But neither survived long in this space.

FTX collapsed in November 2022 due to mismanagement and fraud, abruptly ending its tokenized stock offerings. Binance shut down its program shortly after due to regulatory pressure. Authorities in several countries raised concerns about investor protection, lack of oversight, and potential circumvention of securities laws.

These failures revealed critical challenges:

Kraken appears to have learned from these missteps. By partnering with regulated financial firms like Backed Finance and focusing on transparency, auditable reserves, and compliance-first design, Kraken aims to build trust where others failed.

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Why Are Crypto Platforms Chasing Tokenized Stocks?

The answer lies in three powerful forces: market size, technology, and user demand.

1. Accessing a $52 Trillion Market

As of 2025, the total market capitalization of U.S. equities exceeds $52 trillion—more than 45% of the global stock market. For crypto platforms seeking growth beyond volatile digital assets, this represents an enormous opportunity.

Tokenization allows them to offer exposure to blue-chip companies without requiring users to open traditional brokerage accounts—especially valuable for investors in regions with limited access to U.S. markets.

2. Unlocking Blockchain Advantages

Blockchain brings transformative benefits:

These features align perfectly with the needs of retail investors and underbanked populations worldwide.

3. Building Ecosystem Value

Beyond trading, tokenized stocks can be integrated into decentralized finance (DeFi). Imagine using your tokenized Apple stock as collateral in a lending protocol or earning yield through staking mechanisms. This composability enhances utility and locks users into broader financial ecosystems.

For Kraken, xStocks isn’t just another trading pair—it’s a gateway to deeper engagement and long-term retention.

How Will This Impact Traditional Stock Exchanges?

Platforms like Nasdaq and the New York Stock Exchange (NYSE) aren’t immune to disruption.

Traditional exchanges face structural limitations:

Tokenized stocks directly challenge these norms. A retail investor in Nigeria can now trade Tesla tokens at midnight via a crypto app—something impossible through conventional brokers.

But this isn’t purely adversarial. Many traditional institutions are already exploring blockchain solutions:

The future may not be “crypto vs. TradFi,” but rather collaboration—where legacy players adopt blockchain infrastructure while maintaining regulatory oversight.

Moreover, increased scrutiny from regulators like the SEC could lead to clearer frameworks for tokenized securities, benefiting compliant innovators like Kraken while filtering out bad actors.

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Core Keywords Driving the Trend

To ensure visibility and relevance in search results, here are the essential keywords naturally embedded throughout this discussion:

These terms reflect both user search intent and the technological undercurrents shaping the industry.

Frequently Asked Questions (FAQ)

Q: What are tokenized stocks?

A: Tokenized stocks are digital representations of real-world equities or ETFs recorded on a blockchain. Each token corresponds to ownership of a portion of the underlying asset and can be traded peer-to-peer without traditional intermediaries.

Q: Are tokenized stocks safe?

A: Safety depends on custody, transparency, and regulation. Platforms like Kraken use regulated partners (e.g., Backed Finance) to hold actual shares and undergo regular audits to ensure 1:1 backing.

Q: Can I receive dividends from tokenized stocks?

A: Yes—reputable platforms distribute dividends proportionally to token holders, mirroring traditional ownership rights.

Q: Is trading tokenized stocks legal everywhere?

A: No. Regulations vary by jurisdiction. Kraken’s xStocks targets non-U.S. markets where such services comply with local laws. Always verify your region’s stance before investing.

Q: How is this different from buying stocks via a regular broker?

A: Tokenized stocks offer 24/7 trading, instant settlement, fractional purchases, and potential DeFi utility—advantages not available in traditional brokerage accounts.

Q: Why use Solana for xStocks?

A: Solana offers high throughput, low transaction fees, and fast finality—ideal for frequent trading and global scalability.

Final Thoughts: A New Era of Financial Inclusion

Kraken’s xStocks initiative marks a pivotal moment in the convergence of crypto and traditional finance. Unlike earlier efforts by FTX or Binance, this push prioritizes compliance, security, and long-term sustainability.

While challenges remain—especially around regulation and mass adoption—the trajectory is clear: tokenized assets are the future of finance. They democratize access, increase efficiency, and unlock new use cases across DeFi and Web3.

For investors, this means greater flexibility and lower barriers. For platforms, it’s a path to differentiation and growth. And for traditional institutions? It’s a wake-up call—and an invitation to evolve.

As blockchain matures and regulators adapt, we may soon see tokenized stocks become as common as online banking. The bridge between Wall Street and Web3 is being built—and Kraken is laying some of the first bricks.